EMERGING MARKETS-Sanctions threat keeps rouble cautious, China stocks tumble

* Rouble claws back ground after early losses

* Poland's zloty boosted by ratings outlook upgrade

* EM stocks down after 1.5 percent falls in China

By Marc Jones

LONDON, April 16 (Reuters) - Nervousness about new Western sanctions on Russia kept the rouble and Moscow stocks on the back foot on Monday, while emerging markets were weak generally after the latest clamp-down on risky lending in China hit its markets.

A host of stories were unfolding, including Hong Kong dollar pressure, political strains in Kenya and Zambia, and a surprise ratings upgrade for Poland, but it was the swings in Russia that again dominated the markets' focus.

Relief that Western missiles fired at Syria at the weekend over a suspected poison gas attack had steered clear of Russia's troops, making any escalation less likely, was balanced by U.S. talk on Sunday of more sanctions and a sharp drop in oil prices.

The rouble had recovered most of its early losses against the dollar but was still slightly weaker against the euro, trading at 61.92 and 76.52 respectively.

Moscow's dollar-denominated RTS share index fell 0.6 percent to 1,098.26 points and the rouble-based MOEX index dropped 0.2 percent to 2,171.28 points.

Aluminium giant Rusal (HKSE: 0486-OL.HK - news) , which was the main victim of the latest sanctions, saw its shares shed another 6 percent too, though sovereign bond markets were notably calmer after their recent lurches.

"There are still a lot of uncertainties, there are still sanctions to come out and we don't know where it ends, but it feels like the market reaction was a little bit over done," Standard Life Aberdeen portfolio manager Viktor Szabo said.

"Thinking beyond the nuclear option of (sanctioning) sovereign debt, all the other options are uncomfortable for Russia but are probably manageable," he said, noting that the country's authorities could support firms hit by the sanctions.

Russia is eyeing retaliatory measures of its own. Deputy Foreign Minister Sergei Ryabkov was quoted on Monday as saying it would not delay adopting legislation allowing it to respond to U.S. sanctions.

In central Europe meanwhile, Poland's zloty hit an 8-week high against the euro after S&P Global (Frankfurt: 851710 - news) unexpectedly lifted the outlook on the country's sovereign rating on Friday.

It added to hopes that Warsaw's relations with Brussels are improving after the lower house of parliament, the Sejm, approved moves last week aimed at addressing EU criticism about changes to its judicial system.

"Our decision to revise the outlook to positive from stable reflects our view that Poland's economic expansion will last longer than we had previously thought," S&P said after its rating move.

The Czech crown and the Hungarian forint also tested 10-week highs versus the euro though pressure remained on Turkey's lira. Its recent drop to an all-time low was a "negative" for its sovereign rating Moody's said on Monday.

CHINA FALLS

It had also been a mixed day for Asia's main markets.

China's major stock indexes posted their worst day for three weeks on worries that slowing credit growth and tightening regulation will start to weigh on the economy this year.

The blue-chip CSI300 index ended down 1.6 percent at 3,808.86, led by real estate and banking firms , while the Shanghai Composite Index slid 1.5 percent to 3,110.65 points.

First (Other OTC: FSTC - news) -quarter Chinese GDP data on Tuesday is expected to show the economy carried most of its growth momentum from last year into early 2018. Analysts predict an expansion of 6.7 percent on-year, only marginally softer than the 6.8 percent reported in the fourth quarter.

That resilience could give authorities' confidence to intensify their regulatory crackdown, now in its second year.

There was also plenty to digest in sub-Saharan Africa.

Kenya's currency held its ground after three election board commissioners announced their resignation, citing failure of the body's leadership and dysfunction in the organisation.

One of the three officials was the vice chairman of the body. The commission was frequently at the centre of controversy during Kenya’s extended election season last year, in which about 100 people were killed.

"The institution has continued to be dysfunctional, with arbitrary decision-making, leaking of internal documents ... and pursuing of personal interests," they said in a statement.

Zambia's bonds, which have fallen in recent weeks, were in also in focus after its finance minister sent a lengthy statement rebuffing claims that its foreign debt may be higher than stated.

In the statement it said the International Monetary Fund (IMF) had not Zambia undertake an independent debt audit and that it had also not defaulted on any of its eurobond payments.

"There have been insinuations in some quarters that the IMF requested the Zambian government to carry out an independent audit of its debt. We are not aware of such a request," Finance Minister Margaret Mwanakatwe said.

For GRAPHIC on emerging market FX performance 2018, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI (Frankfurt: 3HM.F - news) emerging index performance 2018, see http://tmsnrt.rs/2dZbdP5

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For CENTRAL EUROPE market report, see

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For RUSSIAN market report, see) (Reporting by Marc Jones Editing by Louise Ireland)